The Hindu Business Line : Pepper slips on ample supply, weak demand

Spot prices declined by Rs 400 a quintal during the weekend to Rs 9,000 for MG1 and Rs 8,600 for ungarbled as against Rs 9,400 and Rs 9,000 on December 7.

Similarly futures also witnessed a sharp fall. Prices quoted last Saturday were for December delivery Rs 9,000 as against Rs 9,860 on December 7. January Rs 9,400 (Rs 10,275), February Rs 9,650 (Rs 10,500) March Rs 10,125 (Rs10,775), April Rs 10,285 (Rs 10,875) and May Rs 10,425 (Rs 10,940) per quintal.

There was some buying activity by US importers but suddenly they withdrew when some of Indian exporters exported pepper at $1,800 per tonne i.e., $100-150 below the Indian parity, market sources told Business Line. "The buying activity would have continued had the exported resorted to undercutting," they said. It has given the feeling to the US buyers that the prices might fall further.

In fact, there were orders for Indian pepper at $1,900-1,950 per tonne as they are ready to buy Malabar at that level. However, according to them, as everybody in the overseas markets was importing only what was needed to meet the immediate demand their inventory level is very thin. Therefore, some buying activity is expected to turn towards India in December, January and February as pepper is now available only here in required quantity, they added.

Meanwhile, they said, during this period of fresh pepper availability there used to be good domestic demand and that is not forthcoming as a result of increased availability of imported pepper in the inventories of upcountry buyers. "In fact, the impact of imports of pepper is realised now," they said. At least 50 per cent of the pepper imported from Vietnam for value-addition and re-export and that landed here from Sri Lanka are in the market," they alleged.

According to them around 2,500 tonnes of pepper of foreign origin are in the market.

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